Data collection to monitor proper business conduct and reviewing fitness and propriety requirements
As well as ensuring top management's compliance with financial market legislation, proper business conduct requirements are intended to preserve the general public’s trust in supervised institutions and the financial sector’s reputation. Proper business conduct extends to all character-related and professional factors, which enable an office holder to manage a supervised institution correctly.
Data collection to monitor proper business conduct
FINMA's supervisory activities yield information about individuals whose business conduct does not meet the requirements of financial market law or whose fitness and propriety need to be confirmed should the person assume a position subject to these requirements.
FINMA may enter data required to assess compliance with proper business conduct requirements in a database, also referred to as FINMA's watch list, the aim being to make sure that only individuals who meet the proper business conduct requirements under financial market law are involved in the strategic or executive management of authorised institutions, or hold qualified participations in them.
The data collection contains only information necessary to assess compliance with the proper business conduct requirements. This includes:
- identification features: surname, first name, date of birth, gender, place of origin, nationality, address and first language
- education and professional activities: qualifications, further training, expertise, employer and workplace
- financial situation and insurances
- extracts from commercial, debt enforcement, bankruptcy and criminal registers
- criminal charges and criminal complaints launched by authorities
- court decisions, decrees and other official documents
- reports and decisions by self-regulatory and professional organisations
- measures imposed under employment law, administrative law and criminal law
- reports by auditors and third parties appointed by FINMA
- reports on internal audits and investigations of supervised institutions
- a written admission of misconduct to an authority or a voluntary declaration
- documentation relating to a person if it shows that despite there being indications that a supervisory breach has occurred, no FINMA proceedings can be launched against this person because they have absconded
- written undertakings that a person no longer operates in the Swiss financial market either temporarily or permanently
FINMA's data collection is based on Article 23 para. 1 FINMASA and the FINMA Ordinance on Data Processing.
Informing those concerned about data collection entries
FINMA informs the person concerned in writing about any data collection entry. It can defer informing the person concerned if there are predominant interests for doing so.
Compliance with proper business conduct requirements
FINMA reviews a person's business conduct (fitness and propriety) if they are about to assume a specific role subject to the proper business conduct requirements. FINMA therefore recommends that a person informed about a data collection entry should contact FINMA in advance if they intend to assume a position subject to these requirements, or if they are applying for such a position and are not sure whether it is subject to these requirements.
A person's fitness and propriety have to be assessed within the context of the specific requirements and corporate function of a position at a given company as they could be suitable for one role but not for another. Requirements differ, for example, depending on whether the candidate is a member of the executive board or of the board of directors, a CEO, a company director or chairperson of the board of directors. The scope and nature of the future business activity and the size and complexity of the company in question must also be taken into account.
If a person's fitness and propriety are assessed, it may be done by means of enforcement proceedings. FINMA may instruct the supervised institution to remove the person from the position in question.
